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Nabors' Imperial CEO Remains

Despite Nabors Industries'(NYSE:NBR) pledges to do business in a manner that is consistent with the rules of good corporate governance, its board has arguably demonstrated that it can't be trusted to act in the best interests of shareholders.

I believe an independent chair could help address these issues by providing better management oversight and promoting more shareholder-friendly decisions. And many shareholders agree.

While the 2013 shareholder proposal pushing for an independent chair failed to pass, the preliminary proxy voting results show significant shareholder support for the change, with 49.5% of shareholders voting for the proposal. It's also useful to note that more shareholders voted for the proposal than against it, which means Nabors' "victory" resulted from including broker non-votes and abstentions in the final tally.

Nabors' shareholder-unfriendly behaviorI believe shareholders have been poorly represented under Anthony Petrello's leadership as both CEO and board chair.

For example, last year the board failed to implement two shareholder proposals that received majority support, including a proposal pushing to give shareholders the right to list their own board director nominees on the company proxy. In contrast, Chesapeake Energy(NYSE:CHK), Hewlett-Packard(NYSE:HPQ), and Western Union(NYSE:WU) all responded to shareholder pressure for proxy access by either updating their policies or sponsoring their own proposals for proxy access that shareholders could vote on in 2013.

And that's not the only step Nabors has taken to embed management. In 2012, the company adopted a "poison pill" plan without shareholder approval.

Also, Nabors' 2012 compensation plan was so controversial that it only managed to gain a paltry 25% support from shareholders. In addition, the company's perks and benefits were so shady that the company had to disclose in 2011 that the SEC was investigating them. And now, for the third year in a row, Nabors has again failed to receive majority support for its executive compensation plan.

If the company's stock were doing well, Nabors' shareholders might have reason to tolerate the current governance structure. However, the stock has offered a poor long-term performance, with its stock price currently lower than it was five years ago.

The Foolish takeawayNabors' past trend of failing to implement advisory shareholder proposals that receive majority support raises questions about whether the company will in fact respond to shareholder demands for more accountable governance structures.

It is worth noting that there have been recent changes to Nabors' board due to Pamplona Capital Management's success in getting Nabors to add two new independent directors to the board. It is possible that these new directors will push the board to make more shareholder-friendly decisions. However, unless we see a clear sign that they will do a better job of representing shareholder interests, I think shareholders should remain pessimistic about Nabors' future.

Motley Fool contributor M. Joy Hayes, Ph.D. is the principal at ethics consulting firm Courageous Ethics. She has no position in any of the stocks mentioned. Follow @JoyofEthics on Twitter. The Motley Fool recommends Western Union. The Motley Fool has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.